Phoenician Mediterranean Villa, LLC v. Swope (In Re J & S Properties, LLC), 872 F.3d 138

Background

J & S Properties filed Chapter 7; Lisa Swope was appointed Chapter 7 trustee and the estate’s major asset was a building leased to Phoenician Mediterranean Villa, LLC.
After the lease was rejected, tenant Phoenician did not operate the restaurant, canceled insurance, and failed to keep the building heated; pipes burst and the premises flooded.
On January 3, 2014, Phoenician’s principal gave Swope a key that did not open interior locks; on January 16 Focht (debtor’s principal) changed the locks and gave Swope the new key; Swope retained the sole key and provided only supervised access.
Swope filed an emergency motion seeking possession to preserve estate property; Phoenician sought equitable relief and sued Swope under 42 U.S.C. § 1983 alleging Fourth and Fourteenth Amendment violations (wrongful eviction/seizure).
Bankruptcy Court dismissed Phoenician’s suit, finding Swope acted within her duties and was immune; District Court affirmed on qualified-immunity grounds. This appeal followed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a Chapter 7 trustee is entitled to qualified immunity for discretionary acts protecting estate assets	Phoenician: trustee’s lock change/accepting sole key was an unlawful self-help eviction and seizure under state law and the Constitution	Swope: trustees are government officials with duties under §704 to preserve estate assets; exigent action to protect property is permissible	Court: trustees are government officials entitled to qualified immunity for official discretionary acts not violating clearly established law
Whether Swope’s conduct violated clearly established constitutional rights	Phoenician: due process and Fourth Amendment rights are clearly established; changing locks and denying access was an eviction/seizure	Swope: no controlling precedent holding a trustee’s protective conduct in exigent circumstances unconstitutional; DOJ trustee guidance supports changing locks to preserve assets	Court: no sufficiently specific precedent; Swope acted reasonably under circumstances and did not violate clearly established law
Whether seeking post hoc court approval or filing an emergency motion constitutes admission of unlawfulness	Phoenician: filing the emergency motion immediately after accepting key shows Swope knew she needed court order and thus acted unlawfully	Swope: trustees often act first in exigent circumstances and promptly seek court ratification; seeking approval is prudent, not an admission	Court: filing for emergency relief is not an admission of illegality and routine post hoc approval practice should not be treated as waiver
Whether Swope waived immunity by testifying at the emergency hearing	Phoenician: Swope’s testimony without asserting immunity waived her defense	Swope: she was not required to assert qualified immunity at that emergency proceeding; the issue was preserved later	Court: waiver argument forfeited and legally unpersuasive; no waiver of qualified immunity

Key Cases Cited

Harlow v. Fitzgerald, 457 U.S. 800 (qualified immunity protects officials unless they violated clearly established rights)
Ashcroft v. al-Kidd, 563 U.S. 731 (qualified immunity protects all but the plainly incompetent or those who knowingly violate the law)
Anderson v. Creighton, 483 U.S. 635 (clearly established-law inquiry must be specific to the context)
Pearson v. Callahan, 555 U.S. 223 (qualified immunity framework and sequencing of inquiry)
Antoine v. Byers & Anderson, Inc., 508 U.S. 429 (framework for quasi-judicial immunity analyses)
Tenney v. Brandhove, 341 U.S. 367 (common-law immunities carry into §1983 suits)
McNulta v. Lockridge, 141 U.S. 327 (receivership suits treated as against the receivership, not personal liability)
Butz v. Economan, 438 U.S. 478 (Bivens/common-law immunity principles for federal officials)
Rehberg v. Paulk, 566 U.S. 356 (immunity analysis and historical inquiry into common-law immunities)
In re VistaCare Grp., LLC, 678 F.3d 218 (3d Cir.) (trustee as statutory successor to equity receiver; immunity doctrines in bankruptcy context)
Beard v. Braunstein, 914 F.2d 434 (3d Cir.) (trustee-related precedent cited by parties)
In re Harris, 590 F.3d 730 (9th Cir.) (trustees acting pursuant to court order entitled to derivative absolute immunity)